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Traders View 11th March 2011

Date Added: 11/03/2011

Market down


A wave of fund selling has hit grain and oilseed markets this week. Markets were nervous ahead of the USDA report on Thursday, which increased wheat and corn stocks and also production of the Brazilian soya crop to 70 million tonnes. Continued selling has occurred as a result of uncertainty due to the Japanese earthquake.

There are also reports that despite lower Ukrainian oilseed rape plantings, production is likely to be up due to current favourable weather conditions which could increase yields and decrease any abandonment. Defra have also released figures increasing the UK winter osr crop by 11.3% which potentially puts the UK crop up to 2.5 milion tonnes. This is not necessarily bearish to UK prices as there are still concerns regarding oilseed rape production in Germany and Eastern Europe as low plantings combined with frost damage are likely to limit production.

We maintain our view that old crop osr can still come under pressure but whilst there is still uncertainty regarding new crop, harvest prices are more likely to rise than fall significantly.




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